Recreate ASA — Earnings Release 2022

Nov 11, 2022

Recreate ASA third quarter report 2022: Challenging times

Recreate ASA third quarter report 2022: Challenging times

Porsgrunn, Norway, 11 November 2022: Rental income in the quarter of NOK 31.5 million, an increase of 7 per cent from NOK 29.5 million in the same period of 2021.

The market value of the property portfolio totaled NOK 2.95 billion as of September 30th, 2022, representing an increase of NOK 350 million compared to the same period in 2021. Yield effects driven by increased long-term interest rates resulted in negative total portfolio value adjustments in the third quarter of NOK 147.6 million. Operational and financial one-off effects totaled negative NOK 44 million in the quarter.

Profit before tax of negative NOK 221.8 million in the quarter, compared to NOK 8.7 million in the third quarter of 2021.

Fair value per share NOK 43.6 as of September 30th, 2022, a decrease from NOK 49.5 at the end of the third quarter 2021.

Acquisition of Inkognitogaten 33 was completed in the third quarter, refurbishment project in Inkognitogaten 33 was also finalized – leaving Recreate with no ongoing projects under construction at the end of the third quarter 2022.

Recreate has a stressed liquidity situation and an uncertain short-term debt refinancing (including substantial other debt with related parties) within the fourth quarter of 2022.

Recreate is also considering a potential share issue to be launched within the coming weeks, for the purpose of rising capital towards running operational commitments and to strengthen its liquidity going forward.

CEO and founder of Recreate Emil Eriksrød comments on the performance in the third quarter of 2022:

‘’Third quarter of 2022 has been challenging on many levels with increasing interest rates, rising inflation and higher energy cost. Uncertainty in the financial markets effected Recreate in the quarter, as we had to acquire short-term financing with associated high cost. Increasing yields driven by higher interest rates led to a net negative value change of 4.8 per cent on our total portfolio, which can be considered to be in line with overall market conditions.

We completed the Inkognitogaten 33 transaction and refurbishment project in July and September respectively. Inkognitogaten 33 is centrally located property next to the Royal Castle in Oslo, and I am delighted with the outcome of our project preserving this magnificent and historic property from the 1870’s with a modern and efficient floorplan and obtaining a BREEAM Very Good certification.

With the completion of the Inkognitogaten 33 project we have no projects under construction presently. This is the first time for many years that Recreate – mainly a real estate developer - does not have any ongoing construction projects, but at the same time I am pleased with the timing due to current market outlook.

After the end of the quarter market conditions further deteriorated leading to the decision to not complete the acquisition of Parallell, as satisfactory financing was not obtainable.

We are currently experiencing uncertainty in the financial markets and corresponding funding possibilities, with a stressed liquidity position. We are working on a number of alternative solutions to strengthen our liquidity and financial position, both short-term and long-term, including the sale of several properties and to obtain additional equity funding in the market"

Please find enclosed the report and presentation for the third quarter of 2022.

For further information, please contact:

Emil Eriksrød, CEO

emil.eriksrod@recreate.no

+47 415 22 463

Eirik Engaas, CFO

eirik.engaas@recreate.no

+47 934 99 340

Company in brief: Recreate ASA is a full-service real estate company focused on the development, ownership and management of centrally located and sustainable commercial properties. Visit the company's website at recreate.no.